WuXi Biologics Earnings: Few Surprises; Cut Valuation Due to Slower Growth Outlook

We lower WuXi Biologics' fair value estimate to HKD 28.60 per share from HKD 57.90 per share as we capture a possible slowdown in projects from geopolitical risks. While 2023 revenue growth of 11.6% beat our expected 10.4%, we think both project increase and revenue growth may be challenging in the next three years due to uncertainties around the Biosecure Act. Although the stock is trading at a nearly 50% discount to our valuation, we caution that WuXi's share price will remain very volatile and very sensitive to political rhetoric.